THE impending introduction of bond notes is not an attempt by Government to sneak back the Zimbabwe dollar, Vice President Emmerson Mnangagwa has said. VP Mnangagwa said the planned introduction of bond notes as a medium of exchange was the most topical issue in the country at the moment. “I want to assure business and the general populace that bond notes are not going to replace the multi-currency basket that we are already using,” VP Mnangagwa said.
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The bond notes are expected to be launched in early November as an export incentive of 2,5 percent and 5 percent. “In fact, the notes are coming in as an incentive to our exporters who play the critical role of bringing United States dollars into the economy,” he explained.
VP Mnangagwa said it was time Zimbabweans started trusting each other’s intentions. He made the remarks at the official opening of the inaugural National Economic Symposium and launch of the 2016 Zimbabwe National Competitiveness Report at Rainbow Towers, Harare, last week.
“The bond notes are backed by a $200 million Afreximbank facility and should not be seen as trying to sneak back the Zim dollar before the necessary conditions for de-dollarisation are fulfilled,” said VP Mnangagwa.
Reserve Bank of Zimbabwe governor Dr John Mangudya has said bond notes, which will constitute less than 4 percent of bank deposits in denominations of $2 and $5, will come into circulation at the end of this month. The notes will rank equal in value to the US dollar.
They will be accepted as medium of exchange only in Zimbabwe just like most regional currencies. The RBZ boss said the notes would circulate alongside other currencies including the British pound, South African rand, Botswana pula and Chinese yuan.
VP Mnangagwa also reiterated the call by President Mugabe to shun corruption as it painted Zimbabwe as an unfavourable destination for investment. He said President Mugabe set the tone for the fight against corruption through point number 9 of his State of the Nation Address to Parliament on August 25 last year.
The economic symposium, attended by several Government ministers, officials and captains of industry and commerce, was held under the theme “Enhancing National Competitiveness and Economic Prosperity Through Dialoguing.”
“It is Government’s desire to eliminate, by all means possible, the stumbling blocks that affect the smooth operation of business in Zimbabwe with a view to creating one of the most attractive, rewarding and cherished investment climates in the world,” he said. VP Mnangagwa said Government had come up with the Command Agriculture programme to enhance food security in Zimbabwe.
“The programme targets 400 000 hectares with expected minimum output of 2 million tonnes of maize during the 2016/17 farming season. The programme will support identified farmers with crop inputs, irrigation equipment and working capital at an expected cost of about $515 million.” The inputs are already being distributed countrywide in anticipation of a good rainy season.
On manufacturing, VP Mnangagwa said Government had in June gazetted Statutory Instrument 64 of 2016 which controls cheap imports to cushion local industry. He said this had improved capacity utilisation in many companies due to growing demand for local products.
“One of the success stories that has made headlines recently is that of Chloride Zimbabwe, whose capacity utilisation has reached 100 percent from a very low level of 5 percent before SI 64.” In terms of mining, he said, value addition of minerals such as gold and diamonds was already underway and that the objective was to implement a beneficiation plan for platinum miners.
The VP said gains had been noted in gold mining during the first half of the year while Government was also supporting activities of small miners with a $100 million mechanisation facility. He said it was imperative for Zimbabwe to compete against other economies.
VP Mnangagwa said Government was in the process of setting up the National Competitiveness Commission and the National Productivity Institute, with enabling legislation and the board now at advanced stages.
The initiatives form part of widespread reforms to improve the country’s ease of doing business to attract foreign investment. This dovetails with efforts to implement the Zimbabwe Agenda for Sustainable Socio-economic Transformation covering the period 2014 to 2018.